Which of the Following Dampens the Effect on GDP of a Change

question 112

Multiple Choice

Which of the following dampens the effect on GDP of a change in government spending?

• A) The money supply changes when real income changes.
• B) Taxes change when government spending changes.
• C) Money demand changes when real income changes.
• D) People do not expect much from the government.
• E) Aggregate spending does not respond to changes in the interest rate.

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